MegaSack DRAW - This year's winner is user - rgwb
We will be in touch
Borrow £100k, buy £120k house, sell 20 years later at £360k, assuming paying back double the mortgage amount profit = £120k.
Borrow £300k, buy £360k house, sell 20 years later at £1.08m, profit £360k.
Borrowing more isn't necessarily bad when it pays off more than it costs you.
NOTE this is not advice, house prices can go down as well as up - just an illustration of how borrowing more COULD be a good investment. This is how companies grow also.
The "just curious" thing is a sure sign of a massive chip on shoulder thing.
Thing is, you can’t service that debt forever so you need a pretty good plan for what to do when your income runs out.
Sell house, pay off mortage, buy smaller new house with proceeds.
Fine if you live in posh house and are willing and able to move to something cheaper. Not so fine if you live in a shit hole and ran your debt up on fast cars, flash bikes and foreign holidays.
(I know this thread is about posh houses but I think NJee20 was talking about ANY debt)
Sell house, pay off mortage, buy smaller new house with proceeds.
This is my view - I could be mortgage-free and get a decent 3 bed detached in the same area as I am now but I think I would rather enjoy being in the larger house whist we have a growing family + dog + rabbits at home...
Sell house, pay off mortage, buy smaller new house with proceeds.
Better yet if you are willing and able to move to a smaller house in a different (cheaper) area those proceeds will go further still.
We're in the SE, so transplant our house to certain parts of the NW or Scotland (very pretty parts IMO) and it would be about half the price!
Which to me seems insane but as long as that there London insists on unbalancing the housing market, people like us will want to up sticks and use potentially stupid housing equity to retire to a nice little cottage by the sea, probably pissing off the locals in the process...
The “just curious” thing is a sure sign of a massive chip on shoulder thing.
It really isn't, you should see the shit piece of a car he drives.... 😉
The “just curious” thing is a sure sign of a massive chip on shoulder thing.
Or perhaps he thinks he is missing a trick. And possibly he is - it sounds like he may not have considered bumping off the MIL
Better yet if you are willing and able to move to a smaller house in a different (cheaper) area those proceeds will go further still.
Yeah I have considered buying a smaller house with holiday lets within the grounds (which we could do if we moved towards the east coast - Whitby area, but inland slightly) and for the price of a 3 bed detached in Harrogate we could get something pretty decent and get an income from the letting. I wouldn't do this whilst our girls are at school though, so that's one for a few years down the line.
Or perhaps he thinks he is missing a trick. And possibly he is – it sounds like he may not have considered bumping off the MIL
MIL owns three houses one of which is in Barbados all mortgage free. I decided a while ago being nice to her and her daughter was a better strategy .
However I'm not one to rely on others, hence yes I wondered if I was missing a trick within my financial and moral means.
I doubt it. You seem like a decent head screwed on type IMO with a propensity for a bit of “what am I missing out on” in your veins.
If it was a healthy balance, then I’d think nothing more of it. However there have been many posts written by you that always seem to steer towards the “why can’t I? Etc.
I dont think that’s healthy, I don’t mind telling you that because over the years I think you’ve done more than most to combat those slightly errr on the negative side of life thoughts.
And, I honestly treat you like a freind. So happy to pick up on some of your comments.
Like them or not, the less you think about others situations or lifestyles the better. You’ve got a lovely family, you work hard, you ride hard, you’ve combatted some inner demons and I for one applaud very loudly for you.
Enjoy the weekend.
🥳
Wife doesn't work and partner works for uber and have just bought a 500k house..........
.........If you suspect that someone you know is committing Benefit fraud please <b>telephone National Benefit Fraud Hotline on 0800 854 4400 </b>
why can’t I
Yet I didn’t ask that, here and not for a long time elsewhere.
You’ve got a lovely family, you work hard, you ride hard, you’ve combatted some inner demons and I for one applaud very loudly for you.
Thanks. But how do you know my family? 🧐 😉
Or you could just get your buying/selling timing right, along with the right investment amount with each one.
My mates last mortgaged house was bought for about 450K, did a bit to it & sold it for 625K. Moved in with the in laws for a while then bought his current house outright for 350K & It's now worth about 450-475K. It's simple!
Oh & him & his Mrs are sensible. No kids, just a new motorhome they paid cash for & 4 renty houses.
Buy a repo....
I've one terrace that's got coming up to 50 equity and my 3bed detached with the same. I could sell n move into the tterrace mortgage free and that's been possiblefor 6 years I'm 36btw. Took me a lot of work...
Plan is sell terrace buy house in Scotland holiday let it for 4 years sell big house and move north.boom no mortgage and work part time
Doable on Low wages but we don't do finance
A new corsa is 200 a month so 2 newish card is a mortgage payment...
We’re certainly not going to get any inheritance – just about getting ready to pay through the nose for Nursing Care costs for the MIL, that will soon burn through the value of her property.
If this is what your precious offspring - that you've slaved half your life to give them the best you can - will think of you, you've got to ask yourself, is it worth it?
I worked in a manual skilled job that in the late 70s early 80's paid £25ph and £50ph after 6.00pm. When that crashed due to the rise o the machines I was ahead of the game and capitalised on that.
I don't have a huge house after assorted incidents. I do have some great memories of things your children will never do, and and if I could do things different, well being honest I wouldn't.
I saw a 6 bedroomed lochside house on Knoydart last year with 150 acres of land.
650K. The blue one near Inverie?
Or you could pay 1M & live on a new build estate in Harrogate, with a garden about the size of my ex council house one in Durham.
OP they are considerably richer than you.
Or you could pay 1M & live on a new build estate in Harrogate, with a garden about the size of my ex council house one in Durham.
I’ll bite - show me such a £1m house in Harrogate.
Yes you could live in Knoydart but remember you can't eat scenery!
A lot of it is just fortunate timing when entering the housing market.
Out of my friends the value of there houses are all related to when they purchased their first house. I was the last to and concequently have the lowest value one but comparable mortgage payments. It's just one of those things.
I entered 15 years ago, I have no idea how millennials do it without family help.
How I managed it.
It was a series of half chance, right place at right time decisions..
Cheap car?
No Carribean Holidays?
No kids?
No expensive hobbies?
Lots of options of what to spend money on. Choose your own and be happy.
You forgot the designer Italian sunglasses 😎
but remember you can’t eat scenery!
Try telling Nicolas Cage that.
I’ll bite – show me such a £1m house in Harrogate.
https://www.fineandcountry.com/uk/property-for-sale/north-yorkshire/hg2-0jp/1342291
And it's not even detached! 1.4M for a terrace. Sheesh.
And here's a new build stuck right on a busy main road.
https://www.myringsestateagents.com/propertys/details/28584300 🙂
All of the people we know that are 'rich' have inherited property. We know one couple who between them inherited 6 houses before they were both 25, they're doing OK!!!
How expensive is expensive though?
Getting an 'average' house in the SE might take some serious sacrifices. Getting the same value of house out of town anywhere north of Birmingham and you'd be the subject of this thread. Not anymore of a compromise than anyone in the SE makes but suddenly you're not normal.
It’s all about your attitude to risk and reward, we all have different degrees of what we.ll risk but as others have said
the more you risk the greater (potential) reward (or loss)
Easiest example in early 2000 you are earning £20k and have £5k deposit
Do you (A) buy a 2 bed terrace at £40k and live comfortably and pay over on the mortgage or (B) push the boat out and get a £100k 5 bed and struggle to pay the bills..
10 years later house prices have doubled/ trebled. Only one winner and it’s not the risk averse ‘sensible’ bloke
So many other factors; inheritance, lottery wins, luck, or foresight to buy in an up and coming location etc, kids, divorce, career aspirations. Low interest rates, inflation etc, easy access to credit.
I know this thread is about posh houses but I think NJee20 was talking about ANY debt
My answer of "Sell house, pay off mortage, buy smaller new house with proceeds." only really applies to houses. Other debt caused by buying an expensive new car, buying a bike, buying holidays etc,. is clearly money that is being thrown away. Not many things have such a high chance of making money as houses unless you have the foresight to buy the right classic cars at the right time which is much harder to get right.
With brexit and the issues it’s causing at customs, maybe is a good time to buy a shed load of GX eagles spares from crc, a couple of containers held up at customs for months on end could mean a right short supply in the U.K. ;0)
365 days to return if it doesn’t work out
Never judge a book by its cover.
A lot are relying on houses for future income/capital. I just hope they don’t all sell at once.
Lifestyle inflation is difficult to curb sometime, especially with cheap cash around. Not that it is a bad thing.
Being "lucky", "right time, right place" can be a misnomer. Ever heard of the 18 year property cycle? Many here have probably felt they timed it right but have been in the game for a long time. Property is a very long-term investment. Yes, you can make some money from flipping, but only a profit margin and not capital growth.
And here is me trying to get out of being a property magnate.*
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*Ok, sell up a tiny Highland buy to let flat.
I also remember reading something, I think on moneysavingexpert, that over 20% of mortgages are on interest only and that the average mortgage is £600+ but the top 10% of mortgages average £1300+.
A lot does depend on house prices continuing to rise at more than the rate of inflation and even in "good" times that isn't certain or consistent across the country. I reckon our house has increased in value by between 50-60% in 17 years, we either bought at the end of a local bubble or the area has stagnated.
In contrast: I bought a terraced house as a mid-week stopover for work (with a large deposit the mortgage was 1/3 the cost of rented accommodation), when I came to sell it the estate agent asked what I had bought it for, his response was: "I sold this property five years ago, that's less than what it went for then!". His valuation was nearly double what I'd paid for it, my eventual profit was 70% in two years! That sale went through about six months before the 2008 financial crash, so luck played a part.
I think there's a case for there being an unholy alliance between government and home owners. We keep getting told that X thousand houses need to be built a year to solve the housing crisis but that there's been a shortfall for many years. A shortfall in a product leads to higher prices, conversely an adequate supply or over-supply leads to lower prices so NIMBYism is as much about protecting the future growth in house prices as much as "the field next door".
My job takes me into many large properties and some of them are mini mansions.
The owners are:
Business owners,
Dentists,
Surgeons,
People who inherited huge amounts of money
and last but not least, people who bought at the right time, did up houses, sold well and didn't lead an extravagant lifestyle.
Oh and one lottery winner back in the late 1990's (they were a fabulous couple).
Property is a very long-term investment.
.
Yes, and it is impossible to lose when using it as long term. 50 years ago my parents house cost them £2,800 which proves the point well. They don't live in a great area but I can't see the current value of £250,000 ever dropping to close to £2,800...
Sometimes just hard work. My brother started as a Saturday boy in a high street shop and went on to be a world wide head of a department for an online retailer named after a famous river. Retired at 50 and now travels the world in a luxurious way. He got all the brains of the family but I am rather proud of him. Luckily he never rides bikes so won’t read this.
As people have said, you either have made a lot of money, currently earn a lot of money, inherit a lot of money, win a lot of money, trade up carefully or have a pile of debt. Down here in deepest Surrey (Mole Valley has one of highest average house prices outside central London in UK) it seems like its mostly a combination of high earners, high debt and big inheritance.
Those are both nearly 4000 sq ft properties! And neither are new build and neither on an estate. The one on Leeds Road is architect designed, is used for photo shoots (I know, I have commissioned it once) and for filming.
I also remember reading something, I think on moneysavingexpert, that over 20% of mortgages are on interest only and that the average mortgage is £600+ but the top 10% of mortgages average £1300+.
Only the top 10%?
£1300 as a mortgage repayment is probably 3-bed semi detached in a not too rough area of Reading! Average in a very non aspirational kind of way.
A good deal can be made on the right house in the right location in need of renovation. We sold our first house for £220k and stretched ourselves like mad to buy a seriously run down cottage in North Hampshire. Six years of DIY renovation, combined with Crossrail being announced 20 minutes north of us, mean we have just sold the house and have made a good deal more than the first place cost - the house has earned more in six years than my (moderately well paid) day job.
Just stretching again to buy another fixer-upper - but this time it'll be our forever home.
I reckon they have gone for an interest only mortgage. I know a couple of people with those and I'm amazed that they don't admit to having any real idea of how that's going to get resolved (except in both cases they will one day inherit from parents).
Doesn't really matter how it is going to be resolved, keep it long enough and it will make some money. Look at it like a smart form of renting especially as an interest only mortgage is probably about the same price as rent for the same type of property.
Look at it like a risky form of renting
Ftfy
I reckon they have gone for an interest only mortgage. I know a couple of people with those and I’m amazed that they don’t admit to having any real idea of how that’s going to get resolved (except in both cases they will one day inherit from parents).
What exactly do they need to "admit"?
They're riding the property value escalator, ride it long enough and they'll probably make a tidy sum as well as getting to live in a nicer house...
Makes me feel like a bit of a mug for having a repayment mortgage.
TBH the British have an unusual attitude to housing. We don't build enough and yet we all want to buy instead of rent as an investment (that grows in value due to scarcity of supply) and then we gat all judgemental about the way people fund this odd behaviour...
We have developed a huge liquidity issue in the UK as part of our obsession with buying houses "because property always makes money".
Does anyone really believe we're not building sufficient numbers of new houses? Given the number of empty properties in city centres, I'd say we're building plenty (have you looked at the share price of the major homebuilders?) but they aren't necessarily in the right locations or funded in the right way.
If you buy a new build investment property, which you do with a mortgage based on its theoretical let-out value, but never actually let it out, you can then get further borrowing based on your existing property portfolio. As your portfolio grows, based on house price inflation, your loan to value improves, and you can borrow more and buy more. All without actually populating your properties, which might be being offered at "market" rates for rent set by the local estate agents NOT the market itself.
So the bubble exists, people become paper millionaires and the apartments never get filled lest the market discovers that it ain't worth the rent being charged. The savvy investors must have a vehicle that services the debt, I guess, and I bet that's used to offset gains made elsewhere. And that's easy to set up because we've made creating companies simple, with very little accountability (see the failure of the FRC).
In 2007-08 in Liverpool this was southern Irish investors buying in places like Liverpool on tick. When their economy went south, they apparently just disappeared. Is the UK housing market based on foreign money? Ask anyone in the South East.
Ftfy
Hardly. If you believe that having an interest only mortgage for 20+ years is in any way risky and less likely to waste money than renting you are a fool.
Where did you find a 3 bed semi in London for 300K ?
Never understood the obsession with big houses, more to clean, more diy, **** that!.
We bought a 4 bed ex-LA house years back, was 2 big for the 3 of us, wee 2 bed terrace cottage makes far more sense, for us.
@nobeerinthefridge. Where do you keep all your bikes? Isn't that what the extra bedrooms are for? 🤔
Jealous?
Should have worked hard in school when you were younger innit.
Could have a business on the side.
If you believe that having an interest only mortgage for 20+ years is in any way risky and less likely to waste money than renting you are a fool.
Mmm. Yet someone might have been paying interest for 20 years then at the end of it, find that they now owe the bank several hundred K to buy it. Unless they've saved hard, they're stuffed.
Hundred and one ways of them being able to get into the house.
We had a friend who was born into old money family- you'd never know. He rented a small flat and drove a shed. Didn't do big holidays. Lived very humbly. His parents and brother died in a helicopter crash and everything was left to him. He stopped working and moved into a caravan in Cornwall and bought a new RS6 and a nice watch. He would have preferred his parents were still around.
A chap I worked with owned a niche accounting software company as a 90% shareholder. He lived modestly in a 3 bed semi with 2 kids and drove an old Passat. He sold the business after 6 years to one of the largest accounting companies in the world for a high 8 figure sum. He carried on living the same way, but sat on millions. He could have bought anything!
Mmm. Yet someone might have been paying interest for 20 years then at the end of it, find that they now owe the bank several hundred K to buy it. Unless they’ve saved hard, they’re stuffed.
But they will only owe what they borrowed so they would be pretty hard-pressed (historically) to have bought a house that hasn't increased in value in 20 years. And if (for example) they bought a house for £200k and it is now worth £400k they could sell it and have £200k profit to put into a new house (smaller and bought outright) or perhaps just put it towards a rental.
bought a house for £200k and it is now worth £400k
I bought a property 10 years ago for £125k.
It's still only worth £125k.
Where's my £50k growth?
Ten years is half 20 years.
We bought a bigger house, later in life (just turned 50). No plans to retire yet, I actually enjoy my work. Both have decent pensions building up.
Would have been mortgage free, in a modest 3 bed semi. With a lot of spare cash we’d just not have saved though, certainly not to match the mortgage we’ve taken on. But it’s a calculated move that will see us down size st the point our boys will be buying, with a 50% deposit on something decent each.
We did the same when they were born, going interest only for a period, that allowed them to enjoy a parent at home full time for a few years.
Life’s too short to miss that kind of stuff. If we’d not have taken on this new place we’d probably have brand new cars each, foreign trips a few times a year, but we don’t miss it. Wife has a new motor but I’m happy doing the bangernomics thing.
But remember though, that bigger house comes with substantially bigger bloody Council tax bills. !!!
I bought a property 10 years ago for £125k.
It’s still only worth £125k.
You still have 10 years to go and looks like you are a bit of an outlier (made a really bad choice in your purchase/overpaid). And even given that, you are still actually no worse off than renting.
I think you will find most people who bought a house in 1999 now have a house which is worth many times what they paid. I bought mine in 2001 and the value has increased by over £300K.
Where do you keep all your bikes? Isn’t that what the extra bedrooms are for? 🤔
In the garage, along with all the other outdoor and gardening stuff. it's 30k for another bedroom, I'll not bother thanks. 🙂
I can't read all this, but I love people's made-up fantasy life story explanations. The bottom line is that people live in large houses because for whatever reason, they can afford to. You can go nuts creating fantasy background, secret Lottery winner, retired drug dealer, invented the internet / pork pies / tubeless tyre technology / put 1p in a jug every time they swore hypotheticals, but whatever you come up, there's always another option. The bottom line though, is that they have more money than you, sort of.
The bottom line though, is that they have more money than you, sort of.
Or less.
On account of having spent it all on a big house.
Or less.
On account of having spent it all on a big house.
Meanwhile Kryton is embarking on a new part-time career as a drug dealer and frantically filling in Lottery slips and looking for magic beans. It's all STW's fault.
The bottom line though, is that they have more money than you, sort of.
Or it could also mean they have borrowed more money.
So many ways people manage it. People in my age group are usually mortgage free, but a good few I know aren't. They blag it and have no idea how they'll pay their debts off, and basically they don't care and have a very good life and sleep well at night. I'd be cacking my pants.
IME if its' not been down to sheer hard work, good jobs, canny investing or inheritance. It's been down to lying about income with the help of your company, and hiding your debts.
Basically just don't judge a book by it's cover, people lives are just too weird. I for example have been divorced twice. It's cost me the shirt off my back, literally had nothing left. Now I've got one year left on my own place. We're in a position to take on a house down south with no mortgage, and keep mine to rent. She has a nice Merc AMG line, I drive a £200 Renault. I work two days a week, she retires next year aged 52. Absolutely **** knows how that happened, when four years ago I was going to top myself because I lost everything.
A bloke my age has a gernormous house a 100k car on the drive, and we've had to give him money for food and heating, yet he's still doing the same work he did when he bought the house and car?
Or it could also mean they have borrowed more money.
Yes, that falls under the 'sort of' section of my original post 🙂
I have a couple of friends who have similar patterns, i.e. buy house in Cambridge about 15 years back, one did a LOT of work to theirs, the other had housemates to help with the mortgage.
10 years on both sell up at decent profits, one moves to a house in the country that needs a LOT of work, the other moves to a house in Yorkshire that needs a LOT of work. Both do all this work, one sells on at a decent profit once again and how has a big house, 4 acres, and no needs to move again. The other completed work on the house, then renovated the barn that came with it, that is now a holiday let that has about 85% occupancy for the year and pays for itself plus a bit more too.
Essentially they are both in really nice places to live, have manageable mortgages and comfortable lives. Some people just do things differently to others.
Thank god i'm a millennial, I'll never have to deal with any of this!
On account of having
spentINVESTED it all on a big house.
FIFY
Just been talking about 'that bloke'. Just goes to confirm that you can't judge a book by it's cover.
Got parents to release equity so he could keep his house. That ran out.
Got parents to then sell their house and move into his. Parents handed over everything.
Strange enough that's when a BMW M6 appeared on his drive.
Hasn't worked for two years.
Went on holiday for a month this year.....Three trips to Twickers the last few weekends stayed in hotels every time.
So where there's a will there's a way. That said apparently his topping himself when the debt it hits a million.
My mate has a lovely house, then asked if i could come round and help him sort out his old one. I presumed that he'd sold it to buy his new house... No, he had a few hundred bitcoin that he'd mined back in the days when you could do it with a PC for a bit of a laugh.
If you and/or your parents were in the right place at the right time from ~1985-2005, there was a killing to be made on getting rich through buying/selling property; buying to rent; crazy good pension deals; computers; internet; both partners in a couple working; stocks and shares; bitcoin; lottery wins etc. and then having plenty to pass on to your future generations.
Not quite on a Mansa Musa scale, but more than enough to live very comfortably!
I knew a guy that used a carrier bag that looked about five years old same tracksuit bottoms all the time. Turns out he has hundreds of thousands of investments providing income and travels round the world following the England cricket team. As above never judge a book. The opposite is also true with illusions being created with crippling debt.
In the garage, along with all the other outdoor and gardening stuff. it’s 30k for another bedroom, I’ll not bother thanks. 🙂
But the garage came for free?
My garage is the most expensive cycling accessory I have!
We have developed a huge liquidity issue in the UK as part of our obsession with buying houses “because property always makes money”.
****s sake. I can't stand the way people on here criticise people who want to buy houses. Like we're all mercenary materialistic middle class bastards or something.
The reason for buying a house is that your monthly accommodation payments go towards YOUR OWN ASSET instead of someone else's. Is this somehow a bad thing? I was desperate to get on the property ladder, cos I was sick of lining someone else's pockets and ending up with nothing.
And over a 20-30 year time span, houses nearly always do make money and lots of it. I know someone who bought his first house for £70k in ooh, 2000, with a little help. If they'd put their gift in the bank and continued renting they'd have enough now to buy a reasonable car. They put it into a house, prices rocketed, they released equity in it to buy another (modest) house, then they sold the first one at big profit, invested that money in a company, now they're loaded. They're secure for life and so are their kids.
Buying houses is nothing to do with 'obsession' it's just bloody good sense.
@Molegrips You forgot to mention landlords! They're loved in equal measure \o/
Interest only: borrow 400k at 2-3% on an asset growing at 5-7% means 3-4% growth on money that you don’t own. Sell house and downsize to repay debt. What’s not to like? That’s a net gain of £130-140k over 10 years. You could buy a house somewhere (cheaper) with that. Google financial gearing.
Molgrips
Our proportion of owner occupiers to rented is far higher than in many other European countries. Many folk in Germany for example prefer to rent. why? somone else has to pay for all the upkeep and maintenance, moving is easy but then they also have a much more regulated rental market with much stronger renters rights.
Property making money is a function of the deliberate housing shortage in the UK - done deliberately to keep prices rising to keep the middle classes happy. Most people will never see this money anyway as they can't sell the house as they need to live in it.
Our obsession with owning property is pretty weird when seen from others viewpoints.
Our obsession with owning property is pretty weird when seen from others viewpoints.
Why though ?
I’ve paid less in Mortgage payments since 1999 than I would have paid to rent similar properties. Moved a few times (whenever I needed to)
Now I have a £250k+ Asset
Would be weird to deliberately not want to do that really.